Friday, December 4, 2015

Donald Trump tapped a man to be a senior business adviser to his real-estate empire even after the man's past involvement in a major Mafia-linked stock fraud scheme had become publicly known, according to Associated Press interviews and a review of court records.

Portions of Trump's relationship with Felix Sater, a convicted felon and government informant, have been previously known. Trump worked with the company where Sater was an executive, Bayrock Group LLC, after it rented office space from the Trump Organization as early as 2003. Sater's criminal history was effectively unknown to the public at the time, because a judge kept the relevant court records secret and Sater altered his name. When Sater's criminal past and Mafia links came to light in 2007, Trump distanced himself from Sater.

But less than three years later, Trump renewed his ties with Sater. Sater presented business cards describing himself as a senior adviser to Donald Trump, and he had an office on the same floor as Trump's own office in New York's Trump Tower, The Associated Press learned through interviews and court records.

Trump said during an AP interview on Wednesday that he recalled only bare details of Sater.

"Felix Sater, boy, I have to even think about it," Trump said, referring questions about Sater to his staff. "I'm not that familiar with him."

According to Trump lawyer Alan Garten, Sater's role was to prospect for high-end real estate deals for the Trump Organization. The arrangement lasted six months, Garten said.

The revelation about Sater's role is significant because of its timing and directness, and marks the first time the Trump Organization has acknowledged publicly that Sater worked for Trump after the disclosures of Sater's criminal background. Trump has said that among his secrets of success is that he surrounds himself with the "best and most serious people" and with "people you can trust."

Sater never had an employment agreement or formal contract with the Trump Organization and did not close any deals for Trump, Garten said.

"He was trying to restart his life," Garten said. "I believe he was regretful of things that happened in the past."

Trump did not know the details of Sater's cooperation with the government when Sater came in-house in 2010, Garten said. But Garten noted that U.S. Attorney General Loretta Lynch praised Sater's cooperation with the federal government, when senators asked about him during her confirmation hearings early this year. She said Sater cooperated against his Mafia stock fraud co-defendants and assisted the government on unspecified national security matters.

"If Mr. Sater was good enough for the government to work with, I see no reason why he wasn't good enough for Mr. Trump," Garten said.

He pleaded guilty in 1998 to one count of racketeering for his role in a $40 million stock fraud scheme involving the prominent Genovese and Bonanno crime families, according to court records. Prosecutors called the operation a pump-and-dump scheme, in which insiders manipulate the price of obscure stocks and then sell them to hapless investors at inflated prices. Five years earlier, a New York State court had sentenced Sater to more than a year in prison for stabbing a man in the face with a broken margarita glass.

Sater declined to discuss his work with Trump.

"Obviously a Donald-and-the-bad-guy piece is not interesting for me to participate in," Sater wrote in an email to AP. His lawyer, Robert Wolf, said information about Sater in public records and lawsuits obtained by the AP was defamatory. He credited Sater's stint as a government cooperator with potentially saving American military lives, although he did not provide details. Wolf told the AP to write about Sater's past "at your own risk" but did not cite specific concerns.

After his 1998 racketeering conviction, Sater spent more than a decade as an informant on the Mafia and on national security-related matters. Federal prosecutors kept even the existence of Sater's racketeering case out of publicly available court records for 14 years.

During that time, Sater launched a luxury real estate development career. Sealed court records prevented potential customers or partners from learning about his past association with organized crime. Sater altered his name, to Satter, and became a top executive in Bayrock, a development firm that partnered with Trump on the Trump Soho high-rise hotel in Manhattan and other branded luxury real estate deals.

Civil lawsuits—including a sealed case filed in U.S. District Court in the Southern District of New York that was obtained by the AP—have alleged that Bayrock engaged in a pattern of misconduct during Sater's tenure, sometimes involving potential Trump projects. The AP obtained a copy of the sealed lawsuit, which was refiled last month, when the original complaint was included as part of a lawsuit Sater filed in an Israeli court. Bayrock's attorney told AP that the firm did not mislead anyone about Sater's past and denied any misconduct. The firm has not yet responded to a version of the complaint refiled in U.S. court last month.

Trump's lawyer, Garten, said Trump had no knowledge of alleged improprieties at Bayrock or reason to believe that Sater was a major stakeholder in Bayrock's projects. Trump only learned of Sater's troubled past when The New York Times reported details in December 2007. In the article, Trump distanced himself from Sater, saying: "I didn't really know him very well."

Garten said Trump had no further interactions with Sater at Bayrock following the revelations of his criminal history. But a new relationship was formed in 2010 when Trump offered Sater office space and a chance to round up new business possibilities for the Trump Organization.

"The guy's been in business a long time, he's got a lot of contacts," Garten said of Sater.